Fintech
The cutting edge of fintech: 3 stocks shaping the future of finance
Blue-chip fintech stocks offer incredible growth potential to investors
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Fintech is a compound word for financial technology. It refers to innovation in what is traditionally an industry that is very slow to adapt. Today the sector includes several blue chip stocks represent the companies that produce everything. Products and services range from back-end technology that allows banks to operate more smoothly to consumer apps that facilitate the transfer of funds.
However it may manifest itself, fintech is a market that is expected to grow rapidly in the future. Its compound annual growth rate between 2024 and 2032 is currently expected to be average 16.5%. These growth rates are bound to produce stocks that appreciate significantly.
The face of finance continues to change rapidly, which means now is the time to invest. Capital deployed wisely today has the potential to become something much greater in the future.
Visa (V)
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Visa (NYSE:V) is one of the pioneers among fintech stocks. Today it is one of the leading blue chip companies in the world and represents a strong investment overall. You have to go back to 1958 to find its origins. That same year the company began issuing the first consumer credit cards. In 1976, Visa expanded card issuing internationally, and the company grew to its current form.
Visa’s dominance in the fintech sector is one of the reasons I consider it one of the best fintech stocks to buy. Its dominance is reflected in its earnings. More recently, the company revenues grew 10% while GAAP earnings increased 12%. There is a strong case to be made for investing in stocks from a fundamental perspective.
Additionally, the company continues to show innovation with its recent announcement of its new generative AI tool to prevent enumeration attacks. These attacks involve the use of complex scripts and bots, resulting in fraud losses of more than $1.1 billion per year.
Nu Holdings (NU)
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Nu Holdings (NYSE:NU) demonstrates how valuable the global opportunity presented by fintech stocks has become. Much of this narrative centers on innovation that brings previously unbanked customers into banking.
The company added 19.3 million customers during 2023, bringing the total to 93.9 million at the end of 2023. Nu Holdings therefore surpassed 100 million customers on May 8, making it the first digital banking platform outside of Asia to reach this milestone. This resulted in staggering growth across important metrics, including net profit with rising numbers $378.8 million for the first fiscal quarter of 2024up from $141.8 in the first quarter of 2023.
Latin America continues to receive a lot of attention regarding fintech because the region brings many new customers to the banking sector. Nu Holdings has done a particularly good job of this thanks to its efforts in Brazil, where it now has 92 million customers, making it one of the best fintech stocks to buy.
MercadoLibre (MELI)
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MercadoLibre (NASDAQ:APPLES) is part Latin American e-commerce giant and part Latin American fintech giant. AND the latter we will discuss regarding its strength as a blue-chip fintech actions worthy of consideration.
Both revenue and revenue increased 36% in the first quarter of 2024. The overall fundamental picture for MercadoLibre remains strong. This framework includes the e-commerce segment and the fintech segment, the latter of which we will focus on here.
This segment largely includes Mercado Pago which reached 49 million active users in the period. These user base numbers represented a 38% increase during the quarter year over year. This growth is substantially higher than the 32% growth the company reported a year earlier. MercadoLibre’s management attributes increase with strengthening retention rates and more fintech products on its platform.
The company issued more than 1.5 million credit cards in Brazil and Mexico during the first quarter. Investors can find numerous other metrics that all point to MercadoLibre’s continued hypergrowth.
As of the date of publication, Alex Sirois does not hold (either directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to InvestorPlace.com Guidelines for publication.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style focuses on long-term stock picking, buy-and-hold, and wealth creation. Having worked across industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.